The landmark judgement of Gloster Limited v. Gloster Cables Limited & Ors, 2026 INSC 81 delivered by the Hon’ble Supreme Court of India on January 22, 2026, marks a pivotal moment in the intersection of Insolvency Law and Intellectual Property (IP) rights under the Insolvency and Bankruptcy Code, 2016 (IBC).
This case arose from a dispute over the ownership of the trademark “Gloster” (Registration No. 690772 in Class 9) during the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor, Fort Gloster Industries Limited (FGIL). Gloster Limited, the Successful Resolution Applicant (SRA), claimed the trademark as part of FGIL’s assets, while Gloster Cables Limited (GCL) asserted absolute ownership through a series of agreements, including a Deed of Assignment dated September 20, 2017.
The facts trace back to FGIL’s admission into CIRP on August 9, 2018. GCL, acquired trademark license from FGIL in 1995 and later acquired it vide assignment in 2017. GCL filed an application before NCLT under Section 60(5) of the IBC seeking exclusion of the trademark from the resolution plan. The NCLT dismissed GCL’s plea but incidentally declared the trademark as FGIL’s asset, entitling the SRA to its ownership. On being aggrieved by the ruling of the NCLT, GCL appealed to the National Company Law Appellate Tribunal (NCLAT) which thereafter reversed the ruling in GCL’s favour on merits but affirming NCLT’s jurisdiction to decide the IP dispute between the parties. On final appeal to the Hon’ble Supreme Court, it set aside both findings, emphasizing jurisdictional limits under the IBC and underscoring the need for clarity in handling IP disputes during insolvency.
This judgment highlights the dispute between maximizing asset value under the IBC and protecting IP rights under the Trade Marks Act, 1999. The ruling reinforces a fundamental principle: the IBC is a mechanism for resolution of insolvency, not for determination or creation of proprietary rights. It reinforces that NCLT’s powers are not boundless; Though IP matters may be dealt with in the insolvency proceedings, however such is possible only when the dispute has a direct nexus to insolvency, otherwise dispute arising dehors insolvency are tried by other Competent Forum.
TRADEMARK OF CORPORATE DEBTOR: ASSET OR CONTESTED PROPERTY
Trademarks, as intangible assets, are unequivocally part of a company’s property under Section 18 (f) (iv) of the IBC, which includes intellectual property as “assets” over which the debtor has ownership rights. In Gloster (supra) case, the trademark was initially registered in FGIL’s name, treated as an asset in balance sheets, and charged as security in a 2006 loan. However, GCL claimed ownership via absolute assignment, arguing that under Section 45 of the Trade Marks Act 1999, title vests upon assignment, with registration merely evidentiary.
The Supreme Court avoided a merits decision, noting the plan’s neutral stance: it “believed” the assignment was mala fide and that the holding of NCLT as “the transaction to be a preferential transaction under section 43 (2) (a) read with section 46 of IBC and did not confer absolute title over the trademark to GCL”, is perverse, in gross violation of the principles of natural justice and beyond the scope of the enquiry as far as the present case is concerned. Moreover, relying on Sections 43 and 45 of the IBC to justify the assignment transaction was found to be untenable, as it was based on a disputed assignment used to assert ownership over the trademark, and involved issues that fall outside the scope of CIRP and are not suited for determination by the NCLT. Therefore, the transaction through the assignment deed could no longer be an adequate ground to claim ownership over the trademark by GCL.
Therefore, a trademark can be treated as an asset of the corporate debtor only when its ownership is clear and undisputed. In case of a contested trademark, it cannot be decided within insolvency proceedings and must be resolved separately under trademark law as insolvency forums lack specialized expertise to assess and adjudicate IP rights.
JURISDICTIONAL LIMITS OF NCLT UNDER THE IBC
According to section 60 of IBC, the NCLT serves as the Adjudicating Authority with jurisdiction over insolvency matters. Section 60(5) empowers the Tribunal to decide “any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings.” In the Gloster (supra) case, the Supreme Court clarified that this residuary power is not unlimited; it requires a direct nexus to the insolvency process. In the case of Embassy Property Developments Private Limited v. State of Karnataka & Ors, (2020) 13 SCC 308, the Hon’ble Supreme Court held that NCLT cannot adjudicate disputes like title to assets if they fall outside insolvency’s ambit, as this would usurp the jurisdiction of other specialized forums formulated to deal with such cases. In practice, NCLT can adjudicate upon the assets as well as its distribution included in the resolution plan approved under Section 31, as it is binding on all the stakeholders. The Resolution Professional (RP) under Section 25(2)(b) must collate assets, including intangibles like trademarks, for the formation of Information Memorandum. However, the Gloster (supra) judgment ruled that NCLT exceeded its jurisdiction when it declared ownership of the contested trademark, like the “Gloster” trademark in this case. The resolution plan in this case, itself acknowledged the dispute without assuming ownership, thereby making the declaration extraneous.
In Tata Consultancy Services v. SK Wheels the Hon’ble Supreme Court aimed to limit the powers of the NCLT to insolvency-related issues and held that NCLT can only oversee asset involved in the plans and cannot resolve underlying title disputes unless they directly impact resolution viability. The IBC hence does not empower the NCLT to add de novo ownership or title of a disputed intangible asset in an insolvency estate. This demarcation of NCLT powers protects IP integrity and efficiency in the insolvency proceedings.
PRACTICAL IMPACT ON ADJUDICATION
The Indian judicial framework has established a decentralized system of specialized tribunals designed to address distinct legal complexities and technical requirements. Because a single adjudicatory body lacks the universal expertise to manage diverse and intricate sectors simultaneously, the same cannot be substituted nor be used as an additional forum to decide such cases.
Similarly, the Trademark disputes are technical and complex in nature and involves questions of prior use, statutory registration, likelihood of confusion, passing off and infringement which requires specialised adjudication and cannot be conclusively decided by the NCLT. Allowing otherwise would convert insolvency proceedings into a backdoor forum for IP dispute resolution, undermining statutory safeguards. Therefore, the present case of Gloster (supra) aims to restrict the jurisdictional boundary of the NCLT in dealing with such cases.
The Gloster judgement (supra) exposes IBC’s lacunae in IP handling, calling for an urgent need to bring about amendments in the Code. According to the IBBI data, 25% of insolvency cases involve intangibles and if an adequate mechanism to deal with such IP disputes is not provided, it would consequently lead to delay in execution of the corporate insolvency resolution process. Therefore, to keep up with the changing times and demands, the legislature should bring an amendment in the IBC to introduce an “IP Fast-Track Mechanism” under Section 60, creating a hybrid panel comprising IBBI nominees, IP office experts, and NCLT members for time-bound adjudication of IP disputes during CIRP.
Drawing a similarity with the provisions from U.S. Bankruptcy Code and UK’s IP safeguards, introduction of such hybrid panel would reduce undervaluation risks. This novel panel would fast-track resolutions, boost recoveries, and align IBC with global standards, fostering investor confidence in IP-heavy sectors. Hence, addressing this gap through legislative reform is essential to ensure timely resolution, value maximisation, and investor confidence under IBC.
Therefore, through the judgement of Gloster Limited v. Gloster Cables Limited & Ors. the Hon’ble Supreme Court have clarified the extent of the application of the residuary jurisdiction of the NCLT under section 60 (5) (c) of IBC, indicating that in cases involving complex and contested intellectual property rights, such disputes may fall outside the NCLT’s jurisdiction during CIRP. The ruling suggests that the NCLT is not intended to serve as an alternative forum for adjudicating intricate IP title disputes, particularly where detailed examination beyond the scope of insolvency proceedings is required.
The above article was authored by Vishakha Parikh (Associate)